Buffalo meat exports from India are likely to grow by 50 percent over the next five years, thanks to growing demand. A report from Investment Information and Credit Rating Agency of India shows that India's annual buffalo meat exports will touch the Rs 40,000 crore mark in the next five years, compared with Rs 26,682 crore in FY16. This means compounded annual growth rate (CAGR) of 8 percent.
In the last 8 years, India's buffalo meat exports have recorded CAGR of 29 per cent, rising from the Rs 3,533 crore-level in FY08. "While India has been exporting buffalo meat for almost two decades, the industry has gained momentum only in the last decade. This can be attributed to multiple factors like increasing demand from developing countries (like China, Vietnam, Thailand, etc), slaughtering method meeting the religious requirements of certain ethnicities, price competitiveness, high buffalo population, and low domestic consumption," said Sabyasachi Majumdar, senior vice president — corporate sector rating, Icra.
Within India, Uttar Pradesh accounts for the highest share (28 percent) of the total buffalo population and has also emerged as the leading buffalo meat producer — housing around 60 per cent of the total standalone slaughter houses, standalone meat processing units and fully-integrated meat processing units.
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India's buffalo meat exports account for around 20 percent of the world's total buffalo meat/beef exports (in volume terms), making it the largest exporter, overtaking Brazil and Australia.
India by and large exports only buffalo meat, compared with other countries which primarily export beef. This growth has been driven both by volume expansion (CAGR of 13 percent) and an increase in realisations (CAGR of 13 per cent). For the last two years, buffalo meat has been the highest agri-related export from India and its contribution to the total exports revenue has almost doubled to 1.56 per cent in FY16, from 0.76 per cent in FY11.
Buffalo meat sold in tin boxes. Image Source: Wikimedia Commons
The buffalo meat industry is largely unorganised and only moderately regulated. It also remains vulnerable to risks pertaining to social and political sensitivity, sustainability of buffalo population, disease outbreak and high competition from global beef industry (this was evident in FY16 when the buffalo meat exports from India declined for the first time in almost a decade as depreciation of Brazilian currency made Brazilian beef cheaper).
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Additionally, there is considerable scope for improvement in the industry infrastructure, which lags the standards of some of the major global beef exporting countries. However, the government is addressing these challenges by focusing on improving industry infrastructure through direct as well as private sector participation, the rollout of schemes to sustain the availability of buffaloes for slaughtering and developing a wider regulatory framework to ensure quality control.
"In the long term, buffalo meat exports are likely to continue to report healthy growth, driven by improving infrastructure, a sizeable buffalo population, a relatively lower price of Indian buffalo meat, and steady demand in the international market," said Majumdar. (IANS)
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